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4 Crucial Actions Your Business Must Take Before a Temporary Closure

Many small businesses are vulnerable to economic uncertainty. The Blueprint covers 4 steps you should take before temporarily closing your business.

We are living in an increasingly uncertain world. COVID-19 is grinding the entire world to a near halt, the unemployment rate is rocketing towards the sky, and everyone is left stranded in their homes wondering when life will return to normal.

Many small businesses are feeling particularly vulnerable during this pandemic, as the unseen specter of coronavirus lurks around every corner.

Many states have implemented stay-at-home orders which mandate the closure of any non-essential businesses and many other states are faced with the potential threat of such orders.

Shutting down your business is a difficult decision to make, but when the time comes for a temporary shutdown, you don’t want to be left in the dark about the process.

Whether your business is closing down voluntarily or by local government mandate, these are the four actions you must take in order to keep your customers, employment base, financing, and reputation as intact as possible.

1. Communicate with your employees

It’s important to notify your employees about your plan to temporarily close shop. This notice ought to include information about when business might reopen and the terms of your employees being laid off.

It’s important to let them know if you plan on bringing back your full workforce or not once the turbulence has subsided.

Be sure to work with your human resources department on the details of this message to ensure these communications answer as many questions as possible, as employees will surely have plenty of concerns.

In light of COVID-19, several states are relaxing regulations on the amount of notice required to lay off your employees, so it’s crucial that you check your statewide actions on that matter.

The important thing is to stress to your employees that you have every intention of bringing everyone back to work once the worst is over and this temporary layoff will give them the opportunity to collect some sort of income through unemployment.

However, layoffs are not your only option as there are additional funding options out there to keep your employees on the payroll. I’ll go into greater detail on this subject next.

2. Set up support funding lines

Currently, the federal government has created the Paycheck Protection Program, which is a small business emergency loan system meant to help businesses stay afloat while maintaining their current employee levels.

The payroll portion of the loans is forgivable on the condition that your business keeps current employees on their current payment status.

As for all other business costs, the federal government is offering loans to small businesses to help cover other operating expenses, with repayment set at a 1% interest rate.

However, if you’re looking to go with your current financial institution, there are plenty of commercial banks offering financial assistance to help businesses cover their costs under various conditions.

Make sure you communicate your needs to your bank in order to set things in motion BEFORE you are set to close.

3. Reach out to supply chains and service providers

Just like reaching out to your financial institutions, make sure you communicate your intention to temporarily close your business to any supply chains or service providers your business uses.

Stress your intention to reopen as soon as possible and let your service providers know you plan on making whole any financial obligations you might have during this time, such as electricity, security, internet, etc.

4. Notify your customers

Next, you’ll want to put up signs in your business explaining your situation and your intention to reopen as soon as possible. Lastly, put out a notice on your social media accounts and any email lists you regularly use explaining why you are closing and when you plan to reopen, if you have a clear end date.

As always, luck favors the prepared

Nothing is for certain right now, so it’s best to make contingencies for whatever scenarios you can think of for your business. These four steps are a solid foundation to start with and with a little luck, this is all you’ll need to do until this crisis finally blows over.

In the meantime, The Blueprint is continuously publishing additional COVID-19 specific content that SMBs can use to make the best of this situation. Hopefully, we can provide the answers you’re looking for.

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The Motley Fool has a Disclosure Policy. The Author and/or The Motley Fool may have an interest in companies mentioned.

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